When you’re young and healthy, health insurance is probably the last thought on your mind. And when you start looking into how much it costs to insure yourself and your family, it can make you wish you didn’t have to think about it at all. But it’s now more important than ever to ensure that you have both affordable and comprehensive health care coverage. Thankfully, you have more options now than almost any other point in history. But sorting through the confusion and finding a solid plan for a fair price can be challenging. Below, we’re going to go over the options you have as an Alabama resident and help you decide which plan is right for your needs.
Major Medical Insurance in Alabama
Major medical insurance goes by many names. Some of those aliases include Obamacare, ACA insurance, Marketplace coverage, minimum essential coverage, and more. If you have to purchase individual insurance for yourself or your family because your employer doesn’t offer a good enough alternative, this is likely the insurance policy you will look into first.
Unfortunately, you can’t just enroll in a plan any old time you like. Unless you qualify for a special enrollment period, you can only enroll in one of these insurance policies during the annual Open Enrollment period which happens November 1st through December 15th. Most people can fill out an application and get a policy through the federal Health Insurance Marketplace, but there are some states which have their own local state exchanges you can apply to. For better or worse, Alabama does not have its own local state exchange, so you will have to get your policy through the federal Health Insurance Marketplace if you would like to purchase qualifying coverage.
There are two very important differences between major medical insurance from the Exchange and the vast majority of other health plans available right now. The difference is that the ACA plans available through the Exchange are what’s known as guaranteed issue policies. This means that if you apply for coverage, you cannot be denied based on your sex or any pre-existing conditions you may have. Furthermore, your monthly premium can only be based on the following:
- Tobacco use
- Family/Individual status
Another thing which sets these insurance policies apart is the Essential Health Benefits coverage mandate. Every single policy that is sold through the exchange must include all of the following benefits:
- Ambulatory/outpatient services
- Emergency services
- maternity/newborn care
- Mental health and substance abuse
- Prescription drugs
- hab/rehab services and devices
- Lab tests
- Preventive and wellness services and chronic disease management
- Pediatrics (including oral and vision)
While all of those benefits sound great on paper, they don’t come cheap. That’s why most people have to apply through the ACA Exchange to see whether or not they qualify for a subsidy. Federal subsidies can help substantially reduce the monthly premium you pay for your health insurance policy so that it is realistically affordable for the average working individual/family. Whether or not you qualify for a subsidy – as well as the amount of subsidy you receive – is determined by a combination of your household size and your household income. The chart below does a good job illustrating where your income needs to be (between 138% and 400% of the federal poverty level) in order to qualify for a federal subsidy:
|Household Size||Annual Income (138% of FPL)||Annual Income (100% of FPL)|
If you make between 138% and 400% of the federal poverty limit, then you will qualify for a generous federal subsidy that makes your ACA Insurance highly affordable. If you make 100% or less of the federal poverty limit, then you will likely have to apply for Medicaid in Alabama – but qualifying for Medicaid has additional stipulations other than just being low income. And if you fall somewhere between 100% And 138% of the federal poverty limit, then you are currently out of luck. Alabama is one of several states which has decided not to accept federal funds to help expand Medicaid to these low-income individuals and families so that they can get the health care they need at an affordable price. Until local politicians change their mind about this, Alabamians in this income coverage gap will have to look at other options, such as short-term health insurance.
Short Term Health Insurance in Alabama
If you fall into this coverage gap, it could make major medical insurance prohibitively expensive since you don’t qualify for any financial help. And since there is no longer a federally-enforced individual mandate to purchase health insurance, you may contemplate just simply going without coverage. But this involves taking a huge risk and leaving yourself vulnerable to potentially life-ruining debt if you or someone in your immediate family does get sick.
Short term plans can provide you with customizable coverage if you’re in a bind. They typically cost about 1/3 less in monthly premiums as an unsubsidized major medical plan, and you can customize your coverage options to make them fairly comprehensive. You can enroll at any time of year directly through your short term insurance provider – no need to go through the ACA. You also have greater consumer protection laws on your side when it comes to short term plans, so if you ever have a claim dispute with your provider, you can easily get help resolving the situation.
Unfortunately, short term plans aren’t perfect. Since they don’t adhere to the same regulations that major medical plans do, your rate and eligibility will be adversely affected by any preexisting conditions you currently have. Many of these plans lack provisions for preventative care and other Essential Health Benefits which are mandatory for ACA plans. If you require lots of ongoing medical care, short term plans can get costly given their annual benefit limits, high deductibles, and lack of caps on your out-of-pocket costs. That being said, for most people, having a short term health insurance plan is still better than having no health insurance coverage at all.
Christian Health Plans/Health Share Plans in Alabama
Christian health plans, AKA health share plans, became very popular after the ACA was passed because they provided people with a low-cost alternative to ACA plans back when the individual mandate was still in place. Now that the individual mandate has been revoked in states like Alabama, there’s less of a demand. But they still have many things in common with short term health insurance, such as:
- No guaranteed issue
- Unlimited out-of-pocket costs
- Lifetime and annual benefit caps
- No guaranteed Essential Health Benefits
- Plans require a less costly “monthly share amount” than an unsubsidized ACA monthly premium
- Not considered to be a “real” health insurance plan by major organizations and care providers
But there are some distinct and important differences between Christian health plans and short term health insurance plans. For one, because these plans are administered by institutions of faith, they have even less federal regulation than a private insurance company. You may be asked to follow certain “participation guidelines” in order to qualify for a plan, such as abstaining from unhealthy habits and declaring a specific faith. Also, there’s technically no enforceable contract between you and your health share plan provider, so if you end up in a claim dispute, you will have little or no legal recourse. Lastly, these plans aren’t classified as “health insurance” by most medical providers, so you may have trouble finding a doctor or facility that will accept your plan. After evaluating the pros and cons, though, you’ll still have to ask yourself: is it better or worse than having no coverage at all?
Fixed Indemnity Plans in Alabama
Fixed indemnity plans are a popular type of insurance supplement that are usually sold alongside other insurance plans, including major medical. It’s rare to see someone getting by on a fixed indemnity plan by itself. These plans offer to help pay for specific medical expenses, but usually only those associated with hospital costs (although doctor indemnity plans do exist). The amount they pay out is fixed and, depending on your plan, could be paid out per day, per visit, or per event.
As with the other ACA alternatives we’ve discussed so far, these plans are not a substitute for major medical coverage. They also come with annual and lifetime benefit caps, and there is no coverage guarantee; meaning that you can be charged more or denied coverage entirely if you have unfavorable pre-existing conditions. Because the coverage options they offer are so limited, it would be difficult for most individuals to manage their healthcare costs by relying solely on an indemnity plan. But they can be used as a cost-effective form of supplemental insurance if you are worried about hospital expenses.
Discount Cards in Alabama
Medical discount cards are a membership program, not unlike AARP or AAA. But the discounts you get will be limited to medical care, goods, and providers. Most people start by searching for a reputable company and then signing up for a discount card plan. From there, you will be expected to pay a monthly membership fee in order to take advantage of your discounts. All you have to do is show your medical discount card wherever you get care, purchase prescription drugs, or at a qualifying retailer, and you’ll be able to pay less for your medical costs – but you will still be paying out-of-pocket.
When it comes to medical discount cards, you as a consumer have to be vigilant and careful. Out of all the major medical alternatives available in Alabama, people looking for medical discount cards are the most vulnerable to getting scammed. Just be sure to do your research, ask questions, and follow through before you sign any paperwork. Some companies advertise inflated discounts that you won’t actually get, or access to caregivers who won’t honor the discounts you signed up for. All it takes is a few phone calls to find out if the pharmacies, doctors, or other care providers that a medical discount card company claims to be affiliated with are reputable or not.